Correlation Between Merck and 189054AY5
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By analyzing existing cross correlation between Merck Company and CLX 44 01 MAY 29, you can compare the effects of market volatilities on Merck and 189054AY5 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Merck with a short position of 189054AY5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 189054AY5.
Diversification Opportunities for Merck and 189054AY5
Very poor diversification
The 3 months correlation between Merck and 189054AY5 is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and CLX 44 01 MAY 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLX 44 01 and Merck is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Merck Company are associated (or correlated) with 189054AY5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLX 44 01 has no effect on the direction of Merck i.e., Merck and 189054AY5 go up and down completely randomly.
Pair Corralation between Merck and 189054AY5
Considering the 90-day investment horizon Merck Company is expected to generate 2.57 times more return on investment than 189054AY5. However, Merck is 2.57 times more volatile than CLX 44 01 MAY 29. It trades about 0.01 of its potential returns per unit of risk. CLX 44 01 MAY 29 is currently generating about 0.0 per unit of risk. If you would invest 10,107 in Merck Company on September 3, 2024 and sell it today you would lose (46.00) from holding Merck Company or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.79% |
| Values | Daily Returns |
Merck Company vs. CLX 44 01 MAY 29
Performance |
| Timeline |
| Merck Company |
| CLX 44 01 |
Merck and 189054AY5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 189054AY5
The main advantage of trading using opposite Merck and 189054AY5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 189054AY5 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 189054AY5 will offset losses from the drop in 189054AY5's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| 189054AY5 vs. AEP TEX INC | 189054AY5 vs. US BANK NATIONAL | 189054AY5 vs. MetLife | 189054AY5 vs. Brera Holdings PLC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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